What Is the Difference Between Dues and Advance Payment?

In apartment management, expressions such as "what are the dues this month?" or "an advance will be collected" are heard often. Although both express collecting money from unit owners, legally and practically there is a difference between them. In this guide we explain the difference between dues and advance payment under Article 20 of the Condominium Ownership Law No. 634 (KMK).

What are dues?

Dues are the share collected from unit owners to meet the apartment's or complex's regular common expenses. Ongoing expenses such as doorkeeper wages, cleaning, electricity and elevator maintenance are met with dues. Dues are determined according to the sharing rules in the law (some expenses equally, some by land share) and are usually collected monthly.

What is an advance payment?

An advance payment is money collected in advance to cover expenses to be incurred during the year. The law states that unit owners are obliged to contribute not only to expenses that have already been incurred but also to "the advance to be collected for expenses" (KMK Art. 20). An advance payment is therefore the creation of a fund in advance for foreseen but not yet incurred expenditures.

The basic difference between dues and advance payment

The difference between the two concepts can be summarised as follows:

• Timing: Dues are usually collected regularly for incurred/ongoing expenses; advance payment is collected in advance for future expenses.
• Purpose: Dues finance routine operations; advance payment is a preparatory fund for foreseen or major expenditures.
• Setting: Both are determined within the operating budget and by the same sharing rules.

In practice, the two concepts are often intertwined; many managements set aside part of the amount collected monthly for routine expenses and part as an advance for future expenditures.

Why is an advance payment collected?

The rationale for collecting an advance payment is to secure the management's cash flow. For example, if a major repair is needed mid-year and there is not enough money in the treasury, the work is delayed. The advance payment collected beforehand allows the management to make the expenditure in time in such situations. The operating budget also shows the advance to be paid by each owner for the estimated expenses.

What if dues and advance payment are not paid?

The law does not distinguish between dues and advance payment in terms of sanctions. Against a unit owner who does not pay either the expense share or the advance share, the same legal remedies are available: enforcement proceedings and litigation. In addition, a 5% monthly late payment penalty is applied on the unpaid amount (KMK Art. 20). The "I'll pay the advance later" approach therefore has legal consequences.

Summary

Dues are the share collected for regular common expenses; advance payment is a fund collected in advance for future expenses. Both are determined by the same operating budget and sharing rules. Both are mandatory; if not paid, enforcement, litigation and 5% late payment penalty come onto the agenda.

Tracking dues and advance collections, accruals and delays from a single point makes management easier. Apt Yönet automatically manages both regular dues and advance collections, providing transparent treasury management.

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Frequently Asked Questions

Are dues and advance payment the same?

No. Dues are collected for regular expenses, advance payment for future expenses. In terms of sanctions, however, they are subject to the same rules.

Am I obliged to pay the advance?

Yes. The law states that unit owners are also obliged to contribute to the advance to be collected for expenses (KMK Art. 20).

How is the advance payment determined?

The operating budget shows the advance to be paid by each owner over the estimated annual expenses.

Is late payment penalty applied if the advance is not paid?

Yes. An owner who does not pay the advance share also pays a 5% monthly late payment penalty for the days delayed (KMK Art. 20).

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This content is for general information only and does not constitute legal advice. You are advised to consult a legal expert about your specific situation.